Simple sugar (Sucrose) starts to melt at about 135 °C (270 °F), without changing its color. The process called caramelisation starts when sugar is heated to at least 150 °C (300 °F), and more often to around 170 °C (340 °F). As the sugar heats, the molecules break down and turn into compounds with the colour and flavour of caramel.

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Caramel candy is a soft, dense, chewy candy. It is made by boiling a mixture of milk or cream, sugar(s), butter, and vanilla flavouring. The sugar(s) are heated separately to reach 170 °C (340 °F). This turns them to caramel before the other ingredients are added.[2] Another way of doing this is to cook all ingredients together. This way, the milk turns to caramel but the sugars do not. This type of candy is often called "milk caramel" or "cream caramel".

Caramel coloring is a dark bitter-tasting liquid. It is what is made after near-total caramelisation. It is then bottled to be used for other things. It is used as food coloring and in beverages like cola.